TransMedics closed 2025 with a banner fourth quarter of $160.8 million in revenue (approximately 32% year-over-year and approximately 12% sequential growth) that validated management's expectation of a Q4 recovery from Q3 seasonality, capping full-year revenue of $605.5 million, up approximately 37%, with operating margin expanding from 8.5% in 2024 to 18% in 2025. OCS drove 5,139 U.S. transplants (approximately 26% of the 19,833 total heart, lung, and liver transplants), with liver the standout (up almost 49% for the year and 36% U.S. share), while heart and lung came in softer due to slower trial starts and other transient dynamics. Q4 net income reached $105 million, aided by an $83.8 million tax benefit from releasing the deferred tax asset valuation allowance, and cash ended the year at approximately $488.4 million. Gross margin dipped to approximately 58% in Q4 on NOP expansion costs, logistics discounts, freight, and year-end inventory charges. Management issued FY2026 guidance above the street with approximately 250 basis points of operating margin contraction driven by transitory investments in ENHANCE/DENOVO completion, OCS Kidney, and OCS next-generation 3.0, and addressed the competitive obstacle in ENHANCE Part B where a cold-storage box maker refuses to randomize against OCS, alongside progress on NOP Connect 2.0, U.S. transplant modernization support, and pending OCS Liver superiority registry publications.
Thank you. Earlier today, TransMedics released financial results for the quarter and full-year ended December 31st, 2025. A copy of the press release is available on the company's website. Before we begin, I would like to remind you that management will make statements during this call, including during the question-and-answer portion of the call, that include forward-looking statements within the meaning of federal securities laws. Any statements made during this call that relate to future events, results, or performance, including expectations or predictions, are forward-looking statements.
All forward-looking statements, including without limitation, our examination of operating trends, the potential commercial opportunity of our products and services, the potential timing, benefits or outcomes of new clinical programs, and our future financial expectations, which include expectations for growth in our organization and guidance and/or expectations for revenue, gross margins, and operating expenses in 2026 and beyond, are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements.
Additional information regarding these risks and uncertainties appears under the heading Risk Factors of our 10-K filed with the Securities and Exchange Commission on February 24th, 2026, and our subsequent SEC filings and the forward-looking statements included in today's earnings press release, which are available at www.sec.gov and our website at www.transmedics.com. TransMedics disclaims any intention or obligation, except as required by law, to update or revise any financial projections, expectations, predictions, or forward-looking statements, whether because of new information, future events or developments, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 24, 2026. With that, I will now turn the call over to Waleed Hassanein, President and Chief Executive Officer.
Thank you so much, Laine. Good afternoon, everyone, and welcome to TransMedics' fourth quarter and full-year 2025 earnings call. Joining me today is Gerardo Hernandez, our Chief Financial Officer. I am thrilled to be here tonight reporting our fourth quarter performance, capping off an outstanding year for TransMedics as we delivered our best operational performance to date. These results were achieved despite external challenges earlier in the year that were designed to distract and disrupt our sustained and transformational growth. I'm extremely proud of the resilience of our team and our business. In addition, I'm grateful to our global clinical users for their continued partnership with TransMedics and their trust in our OCS NOP program throughout the year.
Based on our performance in 2025 and our continued investment in expanding the caliber and the breadth of our team, I am growing exceedingly confident in TransMedics' ability to overcome future challenges as we continue to innovate and disrupt antiquated and inefficient transplant processes in the U.S. and around the world. We are highly motivated and inspired by our mission to expand the utilization of available donor organs for transplantation, while aiming to deliver the absolute best possible clinical outcomes for transplant patients worldwide. We strongly believe that TransMedics is just getting started, and we have our sights focused on new peaks, which we will share with you on today's call. Let me proceed with discussing our business performance. On our last call, we stated our expectation that Q3 seasonality in U.S. transplant activities would be transient and that we should recover in Q4.
Today, we're excited to report that Q4 results that validate our views. Q4 2025 was a banner quarter for our business and allowed us to conclude 2025 on a very high note. Here are the key operational highlights for Q4 2025. Total revenue for Q4 2025 was $160.8 million, representing approximately 32% growth year-over-year and approximately 12% sequential growth from Q3 2025. U.S. transplant revenue grew approximately 11% sequentially to $155 million, while OUS transplant revenue grew approximately 33% sequentially to $5 million. Finally, we delivered an operating profit of approximately $21.3 million in Q4, representing approximately 13.2% of total revenue for fourth quarter, while making substantial investments to fuel our growth.
Now, let me provide the financial results for the full-year 2025. Total revenue for the full-year 2025 was $605.5 million, representing approximately 37% growth year-over-year. We delivered operating profit of approximately $108.6 million, representing approximately 18% of total revenue for the full-year 2025. Importantly, we ended the year with approximately $488.4 million of cash and cash equivalents. Shifting now to TransMedics transplant logistics, infrastructure, and performance. TransMedics transplant logistics service revenue for Q4 was approximately $28.6 million, up from $21.7 million in Q4 2024, representing approximately 32% year-over-year growth and up from $27.2 million in Q3, representing approximately 5% sequential growth....
Throughout Q4, we owned and operated 22 aircraft. In Q4, we maintained coverage of approximately 80% of our NOP missions requiring air transport, compared to 75% in the same period in 2024. We are very pleased by our strong performance in Q4 and full-year 2025. That was fueled by growing OCS case volume and increased clinical adoption. Importantly, as we predicted, our performance enabled growth in overall U.S. liver and heart transplant volumes for the 3rd consecutive year, driven primarily by OCS NOP cases. This is really unprecedented and frankly, humbling. As we do every year, I would like to share full-year OCS transplant volumes and overall U.S. transplants per organ. Here are the key highlights: For the 3rd consecutive year, we grew the total OCS transplant volume. As of February 2022...
2026, our internal company data and UNOS database records show that there were 5,139 total U.S. OCS transplant performed in the full-year 2025. Let me repeat this. As of February 22nd, 2026, our internal company and UNOS database records show that OCS was responsible for 5,139 transplants performed in the full-year 2025, up from 3,735 U.S. OCS transplants in 2024. The overall transplants represented approximately 26% of the total 19,833 U.S. transplants for the year, for heart, lung and liver in 2025, and up from 20% of the 2024 U.S. transplant volume for the same organs. Importantly, for the third consecutive year, we saw growth in overall U.S. liver and heart and lung transplant volumes.
For the full-year 2025, there were 19,833 liver, heart, and lung transplants, up from 18,894 in 2024. We strongly believe that the OCS NOP once again played a key role in driving overall liver and heart market growth due to the increased use of DCD and DBD donors in the U.S. Since 2022, U.S. national transplant volumes for liver, heart and lung grew at a rate of 25%, including OCS NOP transplant volume. Without OCS volume, national volumes for the same organs would have declined by approximately 1% over the same period. Please allow me to repeat this: U.S. transplant volumes for liver, heart and lung grew up 25% with OCS NOP, and would have declined by approximately 1% without OCS NOP case volume.
Based on these facts, we believe that we are delivering on our vision of growing the overall U.S. market. Said differently, we are expanding the overall market, not just taking share. Now, let me discuss our clinical adoption per organ. For liver, in 2025, OCS liver transplant represented 4,197 transplants, or 36% of the overall liver transplant volume in the United States. That is up from 26% in the same period in 2024. For heart, OCS transplant represented 854 cases, or approximately 18% of the overall heart transplant volume, and modestly up from the 17% seen in 2024. For lung, the numbers are small. OCS lung transplants represented only 88 cases, or approximately 2%.
These are very small numbers. We will discuss below how we are planning to address this particular topic. These results underscore the significant remaining greenfield potential for OCS NOP cases across all three organs. Specifically, we are focused on the enhanced heart program to drive increased use in heart transplantation across donor types. Finally, our de novo lung clinical program will focus on reinvigorating the OCS lung market segment in the U.S., while driving much needed expansion of the utilization rates for donor lungs. Both programs have been cleared by FDA and are in various stages of trial activation and enrollment in the U.S. We're looking forward to reporting the progress of these two crucial programs at the upcoming ISHLT in late April. Let me move on to discuss our 2026 plans and guidance.
As we stated before, we're excited for 2026, as we believe it will represent another critical and transformative year for TransMedics business, given our focus on few wide-ranging and far-reaching catalysts for near, mid, and long-term growth for our business. Let me share with you a summary overview of all the growth catalysts we are focused on in 2026. First, OCS and Enhanced Heart Program. Simply stated, Part A of this program is designed to move cardiac transplantation beyond preservation and into functional enhancement of donor hearts. Importantly, it was designed to significantly expand the time and distance limitations currently imposed on the 4-hour DBD heart transplants preserved using cold static storage. Initial feedback is promising, but we are still early in the process. Let's talk about Part B.
Part B of this program is designed to allow OCS to gain a potential new clinical indication in DBD heart transplant segment that are sub 4 hours preservation by demonstrating superiority of outcomes in a head-to-head comparison to current cold static storage modalities. Progress in Part B has been slightly impacted by a competitive dynamic as it relates to cold storage arm of the trial. Specifically, there is a hesitation amongst co-competition to a head-to-head comparison between OCS and their static cold storage modality. We are confident in our ability to overcome this competitive dynamic that we somewhat expected. Importantly, we are committed to conducting this important part of our heart program with the highest level clinical evidence and robust protocol and randomization scheme.
If successful, one or both parts combined could dramatically increase the use of OCS Heart in the U.S. and should have a huge impact on our transplant volume and top line revenue growth. OCS De Novo lung program. As I've stated before, in our humble view, this is the last real chance for lung transplant community to experience the benefits of machine perfusion and integrated NOP services in lung transplantation in the U.S. If successful, this program would resurrect a sleeping giant of lung transplant market and would add significant lung clinical adoption and top line revenue growth for TransMedics. Bringing the NOP model to Europe and rest of the world. This program is actively launching in Italy, and few other European countries have expressed strong interest in exploring the NOP model in their local geography.
Thank you, Waleed. Good afternoon, everybody. I am pleased to share TransMedics' fourth quarter 2025 results. Please note that a supplemental slide presentation with additional details is available in the investor section of our website. As Waleed highlighted, we sustained strong momentum through the fourth quarter, closing the year with solid performance following an expected seasonally softer third quarter in U.S. transplant activity. As discussed in our Q3 call, our rapid growth in prior years often masked the natural seasonality in the U.S. transplant activities. At our current scale, those dynamics are more visible. As we have seen, these fluctuations tend to normalize over the full-year. Total revenue for the quarter was approximately $161 million. U.S. transplant revenue was approximately $155 million, up 33% year-over-year and 11% sequentially.
By organ, liver contributed with $127 million, heart, $26 million, and lung, $2 million. International revenue was $4.8 million, up 24% year-over-year and 33% sequentially. Revenue by organ was $3.9 million in heart, $0.2 million in lung, and $0.7 million in liver. Growth was primarily driven by liver and heart. While we continue to make progress in our international expansion plans, the business remains at an early stage, and quarterly variability is expected due to reimbursement and market dynamics. Product revenue for the fourth quarter was $100 million, up 34% year-over-year and 15% sequentially, reflecting continued momentum across both liver and heart programs. Service revenue for the fourth quarter was $60 million, up 29% year-over-year and 8% sequentially.
The primary driver of growth was logistics revenue, which increased 32% year-over-year and 5% sequentially, reflecting continued expansion and strong utilization of our aviation fleet compared to 2024. Together, these results reflect strong organ utilization, continued OCS adoption, and increasing leverage of our integrated logistics platform. Total gross margin for the quarter was approximately 58%, down 110 basis points year-over-year and 70 basis points sequentially. The year-over-year decline primarily reflects higher clinical service costs associated with expansion of our NOP program, increased logistics discounts, and higher freight expenses. The sequential decrease was mainly driven by inventory-related charges associated with our year-end inventory procedures and higher freight costs from expedited shipments to replenish our costs. Total operating expenses for the fourth quarter of 2025 were $72 million, up 14% year-over-year and 18% sequentially.
The year-over-year growth was mainly driven by increased R&D investment to advance our innovation pipeline and expand product development capabilities, including targeted additions to our technical and development teams. SG&A growth reflected continued IT infrastructure expansion, strategic growth initiatives, and selective headcount investments to support scale. Sequentially, the increase was largely driven by higher R&D investments related to development and testing activities, as well as incremental SG&A investments supporting growth and expansion initiatives. Operating income for the quarter was $21 million, 146% year-over-year and down 9% sequentially. The sequential decrease was primarily driven by higher operating expenses associated with increased investments during the quarter. Operating margin expanded to 13%, compared to 7% in the fourth quarter of 2024. Net income for the fourth quarter was $105 million, a significant increase both year-over-year and sequentially.
Net profit included an income tax benefit of $83.8 million, compared to an income tax provision of $0.1 million in 2024, mainly related to the release of the valuation allowance. The release of the valuation allowance on our deferred tax assets is not merely an accounting adjustment, but a strong indication of our confidence in the sustainability of our long-term profitability, grounded in continued growth and scalability. This decision followed a thorough and rigorous evaluation of the applicable accounting and tax standards. Earnings per share were $3.08, and diluted earnings per share were $2.62 for the fourth quarter of 2025. We ended the year with $488 million in cash, up $22 million from September 30th of 2025, driven by strong operating cash generation and continuous disciplined working capital management.
Overall, our fourth quarter performance reflects another quarter of strong execution, operational efficiency, and continued advancement across our clinical programs. As we operate at greater scale, the TransMedics team continues to demonstrate focus and discipline, investing in growth while maintaining strong financial and operational performance. Let me summarize our full-year 2025 results. full-year revenue reached approximately $605 million, representing 37% growth over 2024. Growth was led by liver, which grew almost 49%, and continued strength in heart at almost 15%. Lung revenue was lower compared to 2024. U.S. transplant revenue reached approximately $585 million, reflecting a 38.6% growth year-over-year. Our international transplant revenue ended the year at $16.7 million, representing a 9.3% year-over-year growth, primarily driven by liver and heart.
Breaking it down by category, product revenue totaling $372 million, while service revenue contributed with $233 million. Breaking it down by organ, liver revenue reached $461 million, heart revenue reached $126 million, and lung reached approximately $15 million. School revenue for the year was $4 million. Gross margin for the full-year was 59.9%, up from 59.4% in 2024, reflecting logistics efficiencies and scale benefits. A portion of these gains was strategically shared with customers through logistic discounts enabled by our integrated network. Margins also reflect incremental costs related to our double shifting program and higher expedited hub replenishment expenses. Total operating expenses were $254 million, up 13% year-over-year.
The increase was primarily driven by a 23% increase in R&D investments, reflecting continuing investment in our innovation pipeline and product enhancements. SG&A grew almost 10% year-over-year, reflecting ongoing expansion of our IT infrastructure and investment in strategic growth initiatives. Operating margin expanded from 8.5% in 2024 to 18% in 2025, a significant achievement in a year where gross margin improved only modestly. This performance demonstrates that the primary driver of margin expansion in our model is operating leverage as revenue scale, supported by a strong discipline to cost management. Net profit for the year was $490 million, compared to approximately $36 million in 2024. We saw benefits from strong operating performance, as well as the previously mentioned one-time income tax benefits recognized during the fourth quarter related to the deferred tax assets.
This performance positions us well as we enter 2026 with continued growth momentum and a strong financial foundation. Earnings per share was $5.60, and diluted earnings per share was $4.87. Now, turning to our total revenue guidance for 2026. We anticipate revenue growth of 20%-25% over the full-year of 2025, which translates to a full-year revenue range of approximately $727-757 million. Growth is expected to be driven primarily by increased organ utilization, continued OCS adoption, and expansion of our service revenue. In 2026, we expect similar seasonal dynamics in the U.S. transplant activity, consistent with prior years. In terms of gross margin, we expect overall margins to remain around 60% over the long term.
This outlook reflects the fact of influence in both product and service margins beyond mix alone. As we expand internationally and continue investing ahead of growth, we may experience some near-term pressure. However, we expect these impacts to normalize as volumes scale across markets. In terms of capital allocation, our focus remains on driving long-term value. We are concentrating our investment in three key areas. First, fueling growth through continued R&D investments, strengthening our NOP network, and targeting expansion into selected international markets. Second, building a stronger foundation by implementing systems that simplify and optimize processes across the business, improving efficiency as we grow.
Third, enhancing our infrastructure and strategic functionality, including our planned move to a new global headquarters to accommodate growth, ongoing upgrades to expand our manufacturing and product development capabilities, and our continued evaluation of strategic opportunities that could further strengthen our platform for the future. Collectively, these initiatives are preparing TransMedics for its next stage of expansion as we move beyond the 10,000 transplant milestone. We continue to make progress on our double shifting pilot program to improve fleet utilization and expect to see early results in the first half of 2026. These insights will help us determine the right fleet size and utilization model to maximize capital efficiency. We achieved our goal of owning 22 jets by the end of 2025.
While there are no current plans to increase the fleet in 2026, we remain open to acquiring additional aircraft when the right conditions are in place, whether to enhance U.S. capacity or to support international expansion. In 2026, we plan to meaningfully increase investment and with particular focus on advancing our clinical programs, completing the final development phase of our OCS kidney program, and continue development of our next generation OCS platform. It is important to note that approximately half of the incremental investment is transitory in nature, and as these initiatives are completed, expense levels should normalize, allowing us to capture additional operating levers over time. Based on the current revenue guidance for 2026, we expect operating margins to be up to approximately 250 basis points below 2025 full-year levels, primarily reflecting the timing and scale of these investments.
Thank you so much, Gerardo. Overall, we're very proud of our 2025 results as we delivered 37% year-over-year growth and achieved positive cash flow from operating activities. We did this while investing in our pipeline and continuing to build our infrastructure to capitalize on our highly differentiated OCS technology and service offering. We are now laser-focused on executing in our initiatives in the potentially transformative 2026 year and are excited about what's ahead. In conclusion, we are humbled and proud of the significant life-saving impact of our OCS technology and NOP service and dedicated team, and remain committed to our mission of expanding access and improving clinical outcomes to patients in need of organ transplantation worldwide. With that, I will now turn the call to the operator for Q&A. Operator?